For Each of the Following Indicate Whether the Transaction Affects

question 72

Essay

For each of the following indicate whether the transaction affects revenue (R) expense (E) owner's drawing (D) owner's investment (I) or no effect on owner's equity (NOE).
1. Made an investment to start the business.
2. Billed customers for services performed.
3. Purchased equipment on account.
4. Paid monthly rent.
5. Withdrew cash for personal use.

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Definitions:

FICA Taxes

Taxes imposed on both employees and employers to fund Social Security and Medicare, based on a percentage of the employees' wages.

Gross Earnings

The total income earned by an individual or business before any deductions or taxes.

Federal Income Taxes

Taxes imposed by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Net Pay

The amount of money an employee receives after deductions such as taxes and retirement contributions are subtracted from their gross salary.